Mike Novogratz, founder and CEO of crypto investment firm Galaxy Digital, broke his weeklong silence on the TerraUSD turmoil, claiming “the global macro backdrop has been brutal for all risk assets this year” and that the UST is “a big idea that failed.”
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- In a letter posted on Wednesday, Novogratz, a backer of Terraform Labs, said cryptocurrency has been under pressure and central bankers are “in the early stages of unwinding a massive liquidity bubble.”
- “The downward pressure on reserve assets, coupled with UST withdrawals, triggered a stress scenario akin to a ‘run on the bank,’” he said.
- Novogratz, who tweeted a photo of LUNA imagery inked on his arm in January, said the tattoo will serve as a “constant reminder that venture investing requires humility.”
- Galaxy Digital, which started investing in LUNA in Q4 of 2020, last week said it expects a US$300 million loss for this quarter.
- “With our diversified business lines, Galaxy remains in a strong capital and liquidity position. We are well-positioned for long-term growth,” Novogratz’s letter said.
- Novogratz also said retail investors should only allocate 1% to 5% of their portfolio to crypto assets.
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